Companies’ Sales Decline as a Result of Dollar Scarcity

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Companies’ Sales Decline as a Result of Dollar Scarcity

By Correspondent

A new report has revealed that not less than sixty-one percent of companies operating across 13 sectors of the Nigerian economy recorded huge declining sales over the past 12 to 18 months due to limited availability of foreign exchange. The report was unveiled on Thursday in Lagos, by the President, LCCI, Dr Nike Akande, and the Regional Managing Partner, West Africa, PwC, Mr. Uyi Akpata. However, it was commissioned by the Lagos Chamber of Commerce and Industry, and the survey was conducted by PricewaterhouseCoopers. We gathered that 42 percent of the companies had been implementing aggressive cost-cutting measures, while 18 per cent were already sacking staff. The survey reveals: “Health care, telecommunications, and oil and gas sectors have the highest impact with the declining sales recorded by the constituent companies put at 100 per cent, 100 per cent and 80 per cent, respectively. “Sixty-seven percent of the companies in the financial services sectors recorded declining sales/revenues as a result of the limited forex and slower economic growth while 63 per cent of agricultural companies experienced the same. “On the other hand, 63 per cent, 60 per cent and 56 per cent of companies in the agriculture, information technology and manufacturing sectors recorded huge declining sales/revenue as a result of the forex rationing policy employed by the Central Bank of Nigeria following the sharp drop in crude oil prices.” The report put the total number of companies that recorded declining sales in the hospitality, power and utilities, and consumer and industrial goods sectors at 50 per cent each. The figures for the professional services industry, construction and real estate, and logistics and transportation were 43 per cent, 33 per cent and 33 per cent, respectively. “The 10 top business challenges facing companies operating in Nigeria are exchange rate (25 per cent), increasing inflation (19 per cent), and economic uncertainties (eight per cent). “Others are high credit (nine percent), regulatory issues (five per cent), poor infrastructure (seven per cent), labour issues (four per cent), unfavourable government policies (three per cent), corruption (three percent), and increased corruption (two per cent).” It further reads: “Our report highlights the exchange rate as the top challenge facing industries in recent times. Capital controls, FX rationing and restrictions on the importation of certain items are measures the CBN has implemented to preserve the foreign reserves and maintain currency stability. “Considering that the outlook for the oil price is a lower for longer scenario, we think these measures, if sustained over a prolonged period, are negative for the economy. “Sustaining the wide premium between the official and black market rates as well as ingenuity to circumvent economic restrictions could further breed corruption and revenue leakages with massive costs to the economy. “The argument has gone beyond the need for an adjustment to a more urgent need to re-liberalise capital flows for a resurgence in foreign investments, which Nigeria needs to buffer its foreign reserves.” Akande explained that the decline in global oil prices had put the nation in a difficult position, leading to the various fiscal and economic challenges. She added: “I believe that a holistic diversification of the economy is desirable and inevitable at this trying period. There are many alternatives to oil and there are a lot we can do to make the best out of the present situation. “More than ever before as a nation, we need more strategic decisions and policies that will put the economy on the path of recovery and social prosperity.” However, the Vice President, Yemi Osinbajo said there were plans to make the business environment more conducive. Insurgency: Deputy Commander Takes Over Operation Lafiya Dole for North East.Maj Gen Hassan Umoru who is the Theatre Commander of Operation Lafiya Dole, North East, has handed over the mantle of leadership of the command to Maj Gen. Lucky E. Irabor who was his Deputy Commander. The handing over and taking over ceremony was held yesterday at the Theatre Command Headquarters Maimalari Cantonment, Maiduguri. Umoru while handing over said that his transfer to the Nigerian Army Headquarters to take over as the Chief of Training and Operations informed his moving out of the theatre command. He said also that he was excited that he is handing over command to his deputy who is a hardworking and committed officer whom he had worked with for over six months. Major General Hassan Umoru was appointed to replace the late Major General Yushau Abubakar Mahmood, the former Chief of Training and Operations, Nigerian Army Headquarters Abuja who recently lost his life in a ghastly motor accident along Maiduguri-Damaturu road on his way to Gasua town on official assignment from Abuja. The outgoing Major General urged the officers and soldiers to extend the same support and cooperation they accorded him to his successor while thanking them for their loyalty and support during his brief stay at the command. “I had really enjoyed my stay and work with the officers and men of the theatre command and pray that they will support and cooperate with the incoming theatre commander to bring to an end the war against terror despite the challenges in the operations. 

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